Among the maternally active genes of Drosophila, cactus is the only one whose loss of function mutations specifically produce ventralized embryos. Its product inhibits nuclear translocation of the dorsal morphogen in the dorsal region of the embryo. Here we report the cloning of cactus and the sequencing of its maternal transcript. The identity of our clones was verified by induction of phenocopies with antisense RNA and rescue of the mutant phenotype with sense RNA. cactus is predicted to encode an acidic, cytoplasmic protein with seven ankyrin repeats. The sequence has similarity to the I kappa B proteins that inhibit the vertebrate transcription factor NF-kappa B. In analogy to results obtained with I kappa B and NF-kappa B, bacterially expressed cactus protein can inhibit DNA binding of dorsal protein in vitro.